Recent US Local Government Debt

Local government debt in 2005 was about $1.25 trillion, and was steadily increasing year on year. But
the budget crisis of the Great Recession put the brakes on local governments,
and since 2011 local debt has increased only modestly.

Viewed from a GDP perspective, local government debt started out at a little under 10 percent of GDP in 2005, and increased to 11.5 percent GDP in 2009 during the Great Recession. Since then
local government debt has slowly decreased as a percent of GDP and is expected to be
almost down to 10 percent GDP by 2016.

Debts and Deficits

US Local Government Debt Since 1900

Local government debt began the 20th century at nearly 7 percent of GDP and,
with a blip during World War I, climbed steadily for the next three decades, reaching 13.7 percent in 1929. Local debt
exploded in the crisis of the Great Depression, reaching over 28 percent of GDP in 1933. In the next decade, local
governments reduced debt radically, bottoming out at about 5 percent of GDP at the end of World War II.

In the post-war period local government debt doubled, reaching 10 perent of GDP in 1960. In the next decade and
a half local government debt plateaued at just under 10 percent and then in 1976-80 declined to 7.3 percent of GDP. In the
early 1980s local government debt began to increase again, breaching 9 percent in 1986, and then slowly increased through the
1990s and the 2000s, reaching 10.8 percent of GDP in 2008 before declining in the 2010s.

Federal, State, Local Debt in 20th Century

At the beginning of the 20th century debt was equally divided between federal and state and local debt, totaling less than 20 percent of GDP. After World War I, the total debt
surged to 45% of GDP. But by the mid 1920s debt had declined to below 35 percent of GDP. Then came the Great Depression, boosting total public debt to 70 percent of GDP.
World War II boosted federal debt to almost 122 percent of GDP in 1946, with state and local debt adding another 7 percent. For the next 35 years successive governments brought the debt below 50 percent of GDP, but
President Reagan increased the federal debt up over 50 perent of GDP, and total debt towards 70 perent to
win the Cold War. President Bush increased the debt to fight a war on terror and bail out the banks in the crisis of 2008.

State-by-State Comparison of State and Local Debt

The bubble chart shows total state and local debt for each state in dollars per capita compared
against the Gross State Product (GSP) in dollars per capita. The chart shows that the overwhelming number
of states show a correlation between state and local debt and GSP. Notable outliers are
the natural resource states, Wyoming and North Dakota, on the low debt
side and New York on the high debt side.

Top links

On October 15, 2018, the US Treasury reported in its Monthly Treasury Statement (and xls) for September that the federal deficit for FY 2018 ending September 30, 2018, was $779 billion. Here are the numbers, including total receipts, total outlays, and deficit compared with the numbers projected in the FY 2019 federal budget published in February 2018:

Federal Finances
FY 2018 Outcomes

Budget
billions

Outcome
billions

Receipts

$3,340

$3,329

Outlays

$4,130

$4,108

Deficit

$833

$779

usgovernmentspending.com now shows the new numbers for total FY 2018 total outlays and receipts on its Estimate vs. Actual page.

The Monthly Treasury Statement includes "Table 4: Receipts of the United States Government, September 2018 and Other Periods." This table of receipts by source is used for usgovernmentspending.com to post details of federal receipt actuals for FY 2018.

This FTS report on FY 18 actuals is a problem for usgovernmentspending.com because this site uses Historical Table 3.2--Outlays by Function and Subfunction from the Budget of the United States as its basic source for federal subfunction outlays. But the Monthly Treasury Statement only includes "Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government, September 2018 and Other Periods". Subfunction amounts don't get reported until the FY20 budget in February 2019. Until then usgovernmentspending.com estimates actual outlays by "subfunction" for FY 2018 by factoring subfunction budgeted amounts for FY18 by the ratio between relevant actual and budgeted "function" amounts where actual outlays by subfunction cannot be gleaned from the Monthly Treasury Statement.

Final detailed FY 2018 actuals will not appear on usgovernmentspending.com until the FY 2020 federal budget is published in February 2019 with the actual outlays for FY 2018 in Historical Table 3.2--Outlays by Function and Subfunction.